My house dreams and nightmares

I am thirty two years old and cannot see when I’m ever going to be able to buy a house. Growing up, buying a house is a big  part of the expected life path of the western world. Get educated, find a career,  find love, get married, buy a car, have kids, buy a house  then retire and die. The economy loves that series of events because it keeps you in a perpetual state of spending. When I was sixteen, I was sure I would have bought a house by twenty five and have my life sorted by thirty. It seems that each year that goes by, things get increasingly more expensive and as death looms closer the dream of financial freedom flies further away. Having a home is a pivotal part of the adult process, but with house prices so horrifically high in London, for the average person it ‘s seemingly impossible. We all try though,  getting a roof over your head you own, your space, not paying dead money for someone else’s mortgage. That’s why there’s been such a rush to own, because people feel like they’re throwing money down the drain in rent.

One of the reasons house prices have risen so fast in London is because of the banks eagerness to create new mortgages (loans) and increase the amount of fiat cash in the money supply. With London house prices going up 500% since 1996, and that’s across all types of build, terrace, flat etc. With real wages being LESS than it was 10 years ago (5-10%), the impossibility of buying a house becomes more apparent to me by the day. Less disposable income, increasing annual inflation and historically low interest rates add fuel to the fire that looks to burn for years to come. Maybe Brexit will slow it down, but seen as a majority of foreign investors are continuously pumping cash into the London property market,  from Asia (China, Japan, Hong Kong, Malaysia & Singapore), the Brexit effect will be limited. It’s probably something many people are going to have to come to terms with. Forever renters.

I’ve grown up around many people, who have never owned their house and I can see that there will be plenty of people in my generation who have no aspiration of ever owning a house and that’s ok. The problem is with these ghost developments being built and speculated with, space in the UK, London especially becomes a premium  making it impossible for people with average jobs to buy. Even rented space gets more expensive as landlords take advantage of the lack of suitable, available properties on the market. For someone who’s worked since uni, has a student loan, contributed to the tax system, I feel like the system has fucked us. Those with family and friends who can help them get on the property ladder are a few hundred thousand steps ahead of the rest. Those who have the option to live at home for a while, whilst saving, are also plenty of steps ahead of the rest. Then’ there’s the remaining few, or many. Self responsibility comes into it, I know, opportunities not taken, too much of a relaxed attitude, and years later you pay the price for wanting to have a life. That’s life. That’s London.

Foreign investment has pushed up prices, taken away available space for building, which could be used for more affordable housing. Plenty of high end developments are being built with the filthy foreign rich in mind. I’ve seen these sites being built and the demographic of people that move in, represents where the investment is coming from,  and the car parks are always half empty even after all units are sold in a building. Many of the properties remain empty, I can see them with no lights on, blinds pulled and no one living in them. The foreign investors don’t want the hassle of having a tenant and they’ve speculated, so are expecting a certain amount of yield annually. If the person who buys wants to visit England a couple of times a year they have a place to stay, family, friends. It’s costly initially, but if you buy and sell at the right time, I can kind of understand why they do it.  The social cost is devastating to those who are looking to find a decent place to live. You get less for your money in a world where people play monopoly in real life, but that’s just how a capitalist society works, and even though I am one of those feeling the brunt end of the stick, I respect the fact that the opportunity is embedded in the blueprint of what has been built.

Change is upon us however, just not anytime soon. New money being pumped into the economy through mortgages and loans still keep the souped up fiat system propped up. Brexit may influence things and I’m sure there will be commercial casualties in the country’s trepid exit from the European Union but there’s no indication that the economy is at breaking point. Over the past decade, strong ties have been made with countries outside of Europe, sometimes at the cost of the British people, but it’s these ties that are going to keep the economic ball rolling well after we leave the EU. We have Germany flirting with recession however Italy, Spain and Portugal are looking stronger, so the future of the EU is uncertain. The economy six thousand miles away in Asia, has been through ups and downs but it seems that even when there’s financial struggle it creates opportunities elsewhere. The world has become an international investment haven for those with the connections  to take advantage, and the rest of are just spectators. Interesting times. We’ll see how long they will last. In the meantime, I won’t be buying a house anytime soon. It’s not really the right time anyway and it might always be too expensive for me. The question is, what else do you do?

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